According to Discovery, pending almost certain approval by its shareholders, a spinoff from AT&T to Discovery of WarnerMedia — formerly known as Time Warner — is most likely to be consummated in April. The federal antitrust review of the transaction ended today with no action taken to block it. AT&T will receive $43 billion worth of cash and debt relief. The transaction will create a company called Warner Bros. Discovery. AT&T will retain its wireless communications network. Its shareholders will own 71 percent of the new company. AT&T bought Time Warner three years ago for $85 billion.
Warner Bros. Discovery will own streaming assets in HBO Max and Discovery Plus and a collection of cable networks, including the former Turner networks’ news channel, CNN, general entertainment and sports channels TBS and TNT, and kids programmer Cartoon Network as well Discovery’s unscripted channels HGTV, Food Network, Discovery, TLC and OWN, according to Broadcasting + Cable.
John Stankey, CEO of AT&T, speaking last year when the deal was announced, said, “For AT&T shareholders, this is an opportunity to unlock value and be one of the best capitalized broadband companies, focused on investing in 5G and fiber to meet substantial, long-term demand for connectivity. AT&T shareholders will retain their stake in our leading communications company that comes with an attractive dividend. Plus, they will get a stake in the new company, a global media leader that can build one of the top streaming platforms in the world.”
In a filing with the Securities and Exchange Commission today, Discovery said that AT&T and Discovery have satisfied the closing condition in their merger agreement related to the Hart-Scott-Rodino Antitrust Improvements Act of 1976. A statutory waiting period specified in the Act has expired or otherwise been terminated, Discovery said. Discovery also said that any agreement not to consummate the transaction between the parties and the Federal Trade Commission or the Antitrust Division of the United States Department of Justice or any other applicable governmental entity, has also expired or otherwise been terminated.
Don Bishop is executive editor and associate publisher of AGL Magazine.